Thursday 15 September 2011

TURNING THE LIGHTS ON IN SOME VERY DARK CORNERS

Earlier today the Independent group on the County Council submitted the following motion for debate at this months Council meeting (29th September)
That this Council notes the investigation requested by the Independent Group for the Head of Paid Service, the Section 151 Officer and the Monitoring Officer to look into:
1.     The alarming increase in the deficit in the NEL pension fund from £421k to £1.46mn between March 2009 and March 2010
2.     The potential breach of either the procurement regulations and European Directives in the buying £2m of services from NEL/NEP without going out to tender when the shareholding of NCC was below 20% or the breach of the council grant allocation procedures.
3.     The principle of NCC members of the Board of NEL/NEP in determining liability for the deficit to the pension fund to NCC, without declaration of interest either way during any relevant debates or decisions in NCC meetings or at the NEL/NLP board
4.     The failure to record any decision by NCC to underwrite the NEL/NEP pension deficit or any other loss
5.     The omission of the liability for the pension deficit from the NEL accounts without a concurrent inclusion of the same liability in the NCC accounts for 2010,
Furthermore this Council resolves to receive the Officers’ report at Full Council for open debate.

We are very grateful to Liam Costello (a fellow Independent candidate and Parish Cllr from Wooton and EH) for his tireless work and his submission of freedom of information requests to help us get to the truth of this whole sorry saga. At a time when the Council can't even afford to keep the lights on in it streets it seems that they are happy to find money for private ltd companies to spend on plugging holes in their pension funds and it also seems as if they care not what the price?

The following explanation owes much to Liam's narrative:

NEL (Northamptonshire Enterprise Limited was formed in 2006 by the merger of 6 companies that all lived off government grants delivering government programmes such as economic development, tourism, training etc. they made their money by slicing off a hefty management fee from funding programmes delivered through EMDA. Five years ago the County Council under Jim Harker's leadership brought them all together under the NEL umbrella.
When NEL was formed, this company quickly became Jim's baby. He seemed keen to hive off as much council business to it as he could. Things such as Single Regeneration Budget funding were passed over by NCC to NEL to administer etc. NCC seemed to be doing everything it could to build up the name and standing of this company.

NEL then became a member company of the Local Government Pension Scheme and its employees became eligible to join.

The articles of association of NEL stated that the borrowings of the company could not exceed the amount it receives in annual grants from the Government, or from other organisations. Essentially this limits the working capital of the company to the value of the funding programmes that it was delivering. It should therefore not be capable of going into debt if the directors abide by the articles. It has no shareholders, no equity, therefore no dividends can be paid. It makes its money by top slicing management fees from grant programmes and paying what some might consider to be fat cat salaries.

When NEL published its accounts for the year ended 31 March 2010, they showed that the company had run up a pension deficit of nearly 1.6million in 5 years. This may have been a bit of an unfortunate consequence of the recession caused by the banking crisis, but given the strict articles, the company should have considered the risk before becoming a member of a final salary pension scheme. Prior to joining the LGPS, the company paid into money purchase pensions where the risk to the company is non-existent.

The 2010 accounts state that the company considered the size of this deficit to be an ‘unwelcome surprise’, but go on to say that NCC gave a simple but unequivocal undertaking to underwrite any future deficits in the pension scheme at the time of the formation of the company. A blank cheque if ever there was one! They do however go on to acknowledge that NEL has primary legal liability for the deficit despite the alleged NCC undertaking.

We have searched the NCC website for any such mention of this undertaking in the Pension Committee minutes but surprise surprise cannot find any. Liam then made a FOI request for a copy of the Admission Agreement between NEL and NCC, and despite a statutory requirement that these agreements are made public they have refused to supply him with a copy. A complaint was made to the Information Commissioner in January this year and he has just received notification from the IC that NCC has been ordered to supply the document to him.

Jumping back to 2010, shortly after their year end, there was a change of government and the announcement that Regional Development Agencies, such as EMDA, were to be scrapped along with the funding streams they delivered through bodies such as NEL. NEL was essentially up the creek without a paddle. It had a pension debt of just under £1.5M and its funding streams had gone.

NEL is not the only company to have found itself in this situation, Visit London has a 2.1 million deficit which they are in dispute with the GLA over, and there was a piece on Look East about an east anglian tourism body that had folded leaving a LGPS deficit of £1million. We are sure that there are others across the country.

So the Council it seems devised a cunning plan to rescue NEL, and their own embarrassment. They decided that despite other Councils in Northamptonshire agreeing to support a new "South East Midlands" Local Enterprise Partnership (SEMLEP) as agreed by the government that they would form their own new body called the Northamptonshire Enterprise Partnership, (NEP) and allocate it a £2m budget for the next 3 years. £1.3 million was to go on back office and administration and £700k on actual economic development, including the infamous Brussels office. (The Northamptonshire European Investment Office)

Cllr Bill Parker at the 24 Feb council meeting said of the NEP partnership
“The sum of £2million would be invested in a Northamptonshire Enterprise Partnership comprised of NCC, business and industry, the skills sector and voluntary sector”.
Yet we now find that the partnership as described by Cllr Parker which should have included the skills and voluntary sectors has not been formed, and instead NEL has now been morphed into NEP. Companies House records and confirms the change of name of NEL to NEP on June 1st 2011

This whole affair we believe was just a cover to give £2million to the former NEL to get it out of financial trouble. One problem they faced however (apart from the name of the organisation) was that because of the value of the services that they were procuring, they should have followed normal public procurement processes. This would have involved a tendering process, advertising the contract in the European Journal etc. This would have attracted great interest from other companies and it would have been difficult to award the contract to NEP. Any company it would seem could have beat NEP in a tendering process to deliver £700k worth of economic development in return for £2million.

There are of course circumstances in which the normal public procurement process can be bypassed, and these were clarified in a Supreme Court judgement recently. these are called the Teckal exemptions. NCC know about these as they referred to them in the report on The future of Direct Services to Adults and Carers in May this year. Essentially to apply the exemption the council must have such control of the company that is proposing to award a contract to, that it could be considered the be a department of the council. One of the factors in establishing whether this control exists is the amount of control that a council has over the contracting company, which should be 20% control. But the articles of NEL limit the voting power of local authority members to less than 20% (article 18). So essentially this service should have been put out to tender, and what they have done may be seen by some as being on the cusp of unlawful. 

Instead however it seems that they spent an untold sum on legal advice to tell them that the money should instead be paid as a"Grant" But the Council also have strict procedures for grant allocations and we believe a lot of local charities and other organisations will be very interested to look at how NEL/NEP were treated by the Council when awarding this "special" grant when matched against their own experiences of late. And just who made the grant application NEL? NEP? and when?

So the new partnership it seems was just a mirage to cover up giving £2million to bail out NEL which is now NEP. Not only does this quango duplicate the work of SEMLEP, (although it was SEMLEP not NEP who delivered the recent Northampton Enterprise Zone)  but is has also been given £2million of Council Tax payers money for three years by way of grant which helpfully covers the same size hole left in the companies pensions deficit.

So where do we start with this one? Well some answers to the questions we raise in the motion above might help, for instance if NEL state in their accounts that they had an unequivocal undertaking to underwrite any future deficits in the pension scheme at the time of the formation of the company then why can we find no record of any decision taken by NCC to do that?

Furthermore if as we state in the motion if NEL had removed the liability for the pension deficit from the NEL accounts in 2010 why is there no concurrent inclusion of the same liability in the NCC accounts for 2010? or in 2011's budget? And can it be lawful for a local authority to underwrite the pensions deficit of a limited company?

And whilst it may be just a standards board issue, why does it seem that certain people who were or have since become directors of  NEL or NEP not declared their interests when proposing or discussing any of these issues over the previous months?

We believe a lot of people have a lot of questions to answer? We hang back at present from calling for anyones head or even singling out individuals for censure, but we do believe that the Council. (The whole Council) has a duty to receive the requested reports and ensure clear answers and accountability's are given.

We look forward to debating these matters further on the 29th of September

2 comments:

  1. They (NCC) threw down the gauntlet (by the actions taken) and now with luck we can see it shoved down their throat, see you on the 29th

    ReplyDelete
  2. Well done to Liam Costello and yourself for bringing this to light

    ReplyDelete

Archives

Followers

Blog Archive

Thank You

Thank you for visiting "tonyclarkegreenparty" The views expressed here are mine and mine alone. They are made by me personally in my own capacity as free citizen and not as representative of any outside body or council that I may serve on or be employed by. However if anyone is offended by any of these comments or feels that they should be corrected then please contact me in the first instance at tony.clarke@email.com and I will do my best to consider your comments and correct any errors.

Etiketler

100 key seats 1980's 1997 2013 50th Birthday 96 Abington Park absent parents abuse Academy Status Adam Simmonds Adam Simmonds. Police and Crime Commisioner Northamptonshire. Class A drugs Adam Simmonds. Police commisioner. Northamptonshire County Council Afghanistan Afro Caribbean Agent airbrushed for change airlines Al Quida Aldi allowances AlQuida Anarchist ANC Andrew Mitchell animated fairy story Anjona Roy Ann Frank Ann Timson Apathy Arab League Council Archway cottages Arms raid arrears. Northamptonshire race Equality Council Ashes to Ashes Ask a Socialist astragate Asylum seekers Audit Baathe Party bamboo joint Banana Banker barbecue tax Bashar Assad bbc BBC radio 4 Bedroom Tax Benefits benito mussolini Benjamin Netanyahu Big Freeze Big Society Billy Bragg Binners Birds black and white cats Black Swans Blair blogger blogs Blood Blowing smoke up your skirt Blue Light Services BNI BNP boardroom buffoons Bone marrow Boris Johnson borough council boot and shoe borough council elections Borough Solicitor BP Bradlaugh Brian Binley Brian Hoare brighton Britain in Bloom British Government broken britain Brown Pelican Bryn Estyn Children's Home budget cuts Bulgarian Bullingdon Club Burglars Bus Interchange Bus Station Bush businesmen Cabinet Call in campaigning Cannes canvassers capitalism Captain Ska Car Park Revenue car parks career wreckers carillion carlisle Carrillion CASPAR Castle Ward Castle Ward 2 Catherine Tate CDC censorship Census 2011 change Charity Commision cheating cheats chicago Chicago Fruit Police Chickens Child Abuse China Chloe Smith Chris Grayling Christmas Christopher Myers chronicle and echo Clement Attlee Cllr Andrew Simpson Cllr Andy Mercer cllr Bill Parker Cllr Brian Hoare Cllr Brian Markham Cllr David Mackintosh Cllr David Palethorpe Cllr David Perkins Cllr Dennis Meredith Cllr Elizabeth Gowen Cllr Gareth Eales Cllr Jean Hawkins Cllr Jim Harker Cllr Jim Harker Road Safety Cllr John Caswell cllr John Yates Cllr Malcolm Mildren Cllr PD Varnsverry Cllr portia wilson Cllr Richard Church Cllr Robin Brown Cllr Sally Beardsworth cllr Scott Collins Cllr Tony Buckley cllr Tony Clarke Cllr Tony Woods Cllr Trini Crake Clr David Perkins Clyde Loakes Coalition government cobblers combustion committee places Community Basher conference 2013 Conservative Conservative Party Conservatives consumption Contracts Corby corporate fools corporate spin corrupt Council Council tenants councy council County Council Election county council elections CPS credit crunch crime Crimea cuts CWU Daily Mail daniel hannan mep. NHS Daventry District Council David Cameron David Harvey David Perkins. Brenden Glynane David Ross day fotlu DDC debt decent homes Defend Council Housing Delapre Abbey democracy wreckers destruction disaster DIT Britain Dostiyo Dot Cotton Duckenfield Duckinfield Ealing Council Earworm Community East Midlands in Bloom East Midlands Labour Party easy read economy Ed Balls Ed Millaband Ed Milliband education election Elections 2013 Electoral iregularity Ellis Island email Emilie Oldknow Emily Oldknow Empowerment fund Enterprise Enterprise Managed Services Environment Agency Eric Pickles ester ranzen EU euro European parliament expelled F W De Clerk F*ck you facebook FAir is worth fighting for Fairground ducks Fairytale of New York Far Right fire Fish MArket Fitzy fixed penalty notice Flashman Floods Florence and the Machine flytipping Fountain free Friends of Delapre Abbey Full Council Gaddafi Gang Culture Gaza GDP general election Geoff Howes George Bush George Bush Jr George Osborne George Osbourne Germany Glasgow mosque GMB Golden Handshake google gordon brown government Government Cuts Grant Shapps greed Greedy Bankers Greek economy Green Green Party Greyfriars growth 1980's Guantanaomo Bay. Shaker Aamer Guernsey Harry Enfield Havelock Havildar Gaje Ghale haymarket Hazel Blears health Helicoptors Help the aged highways Hillsborough hoodies hope not hate House of Commons House of Lords Housing Housing numbers Housing. eviction human rights Ian Gibson IDF il duce Immigration imprint Independent Independent Green Independent Network independents India Injunction inquiry international internet Iran Iraq Iraq war ISIS Islamaphobia Israel Italy IVA jedward Jeremy Clarkson jerk chicken Jihadists Jimmy Carr Jimmy Saville jingles Joe Joyce John Dickie john gardner John Lennon Johnston Press Journalists justice justice for the 96 KBC Ken Livingstone Kevin Quigley Khudadad Khan KPMG Kraken Kurdistan La Madala Labour Labour Group Labour Party Lady Wantage Lampedusa Land Tax Lansbury last of the summer wine Leadership election league two Learning difficulty Learning Disability Lebanon Lee Barron leeds Legal and General Liar Liar Lib Dem Liberal Democrat Liberal Democrats Liberals Libya libya. david cameron Likely lads Lily allen Liverpool lloyd grossman local candidates local governance local government Local Government Association local press localism bill Loft insullation London Labour London Olympics london riots Loo of the year Lord Mandelson Lord Michael Ashcroft Lord Stuart-Smith Lord Taylor Lord Waterhouse LSE Mackenzie mad as a box of frogs Madiba Mahmoud Abbass Malcolm Mildren Margaret Thatcher Market Square Market Square Fountain Market Trader Martyn Gilleard martyrs May 2ns Medhi Hussein media Michael Ellis Michael Foot Michael Turner QC Micheal Ellis MP micheal martin Middle Classes Middle East migrants Mike Ferrigan Milk Snatcher millions Miserable old sod mk dons mortgages MP's Expenses mps expenses Multi Agency Group Muslim community mydavidcameron.com Narrowboats Nasseem Nicholas Taleb Nathan Worrell National Debt national front Nato Nazis. EU NBC NCC Neil Lewington Neil Magregor NEL. MIPIM Nelson Mandela Neo Nazis NEP New Statesman New Year NHS Nick Clegg nick clegg.norman clegg Nick Griffin Niel Kinnock NNDC NNJPU Noor Inyat Khan North Wales Police Northampton Northampton Borough Council Northampton Chronicle and Echo Northampton Conservatives Northampton Independent group northampton independent voice Northampton Labour Party Northampton Labour Party. Northampton Borough Council Northampton Liberal Democrats Northampton Saints Northampton South Northampton South Conservatives Northampton Town Football Club Northamptonshire County Council Northamptonshire County Council Elections Northamptonshire Enterprise Limited Northamptonshire Enterprise Partnership Northamptonshire Music Service Northamptonshire Police Norwich North not all party's are the same ntfc Number 10 Observer Oil Old Labour Oliver Tambos Paddy Tipping MP pakistan Palais de Festival Palestine Parish Poll. Police Commissioner Elections parking parking services parliament parsons Party Political Broadcast Paul Blantern Paul Varnsverry PCC Pegasus Penalty Charge Notices pensioners pest control pest express Peter Mandelson Peter Righton pfi phillip mears photos for all occasions Pinky and Perky Plain English planning police Police and crime Commissioner Police Commisioners Police Commissioner elections political Polycythemia Pope Francis poplar porkie pies President Obama privatisation Professor Pongoo proportionality public consultation public deficit Public Service cuts purdah que sara sara Racism Radio 4 rats Rebekah Brooks reccession Recycling referendum refuse collection regional labour party relegation Rememberence Sunday residents parking retail Richard Hannon right wing riots Robert Cottage Romanian roofing RPA act RSA Rushden Sainsburys Sally Keeble Sam King Scrutiny Seb Coe Second Life Shame on you shameless Shami Chakrabarti Sheltered Housing Shire shirkers Shona Deans Messinger silver medal Simon Cox Simon Williams Skateboarders skivers. scroungers Slipping back in time SNC Snow Spad speaker spies spring boroughs Spring Boroughs Residents squandering St Andrews st andrews road St James Stagecoach stagnation standard and poors standards board stealth tax Stephen Pound MP. Jeffrey Archer Steptoe and Son Steve Messham Stock Market street lights supergran suspended Syria Taliban Tax Evasion tax the rich tea team GB Terry Waite Tescos Tess Scott Thatcher The Cobblers The Conservative Party The Green 'Un The Green PArty The Press The Queen The Report The Ridings The Saints the story of broke the story of change the story of stuff The Sun through the keyhole ticckle Till Death do us part" Tom Watson MP Tony Blair Tony Clarke Tony Clarke MP Tony Woods Tory Tory Government Tory Party Tory's town centre trade unions Trees Trevor Kavanagh TTIP TUC Trident Tuck Inn TVC E-coli and coliforms tweets twitter UAF UK debt UK floods UK Government UK riots UKIP UKIP. Green Party UKIP. Labour Party Ukraine Ulric Cross ULT UN unemployment union flag unitary authorities unitary government Unite against Facism United Learning Trust united nations Unity College Upper class USA usual channels Vara Varnsverry. Guildhall vat Virtual vlog vote Walter Tull Waltham Forest Wardens watchdog WDC Welfare welfare cuts west northamptonshire joint planning unit Westbridge Westminster Weston Favell School what's the point of Nick Clegg wicked William Hague window dressing winter wonderland witch hunt WNDC WNJPU workers Working Class working mens clubs workshy written questions WWII youth services